July 13 2026 | Deals | Energy & Industrials | Due diligence
Ansarada has supported dealmakers across the energy transition for two decades, spanning generation, storage, grid and transmission assets.
Two deals, two completely different sizes. In December 2024, Blackstone and Canada Pension Plan Investments closed on AirTrunk for an implied enterprise value of A$24 billion, the largest data centre transaction in history. Eleven months later, ib vogt sold a 95.18MWp solar project in Segovia, Spain, a fraction of a percent of AirTrunk's size, to a Swiss independent power producer called EOS NER Solar España. On paper, nothing connects a hyperscale data centre platform to a mid-sized Spanish solar farm.
Except one thing does. Both deals were built, financed and priced around the same instrument: a long-term contract that locks in who gets the power, for how long, and at what price. That instrument is doing more work in energy dealmaking right now than almost anything else, and it's worth understanding properly.
What a firm power PPA actually is
A power purchase agreement, or PPA, is a contract where a buyer agrees to purchase electricity from a generator at an agreed price over an agreed term, instead of buying at the spot price on the open market. A "firm" PPA specifies a fixed volume and duration the buyer can rely on, as opposed to an "as-available" arrangement tied to whatever the asset happens to produce.
The Baobab Solar deal is a clean example. The 95.18MWp project, part of a wider 513.1MWp cluster ib vogt has been developing in Spain, was sold on the back of a 15-year PPA with Equinix, a data centre operator. Equinix isn't buying solar panels. It's buying certainty, a fixed claim on a defined amount of clean power for a decade and a half, long enough to underwrite the debt on a new data hall.
Why data centres want to lock this in
A data centre's economics depend on continuous, predictable power at a knowable cost, for years. Compute demand doesn't pause for a windless week or a cloudy month, and a hyperscale facility can't be built on the assumption that spot electricity prices stay where they are today. A long-dated PPA solves two problems at once: it gives the data centre operator cost certainty for a major line item, and it gives the generator (or whoever buys the asset afterward) a bankable revenue stream that makes the project financeable in the first place. That's precisely why ib vogt could sell Baobab Solar the way it did. The PPA, not the panels, is what made the asset attractive to a buyer.
Scale that logic up and you get AirTrunk. The platform already has more than 800MW of capacity committed to customers under contract, and land banked for over a gigawatt more. Blackstone's own team has pointed to data centre capacity demand growing roughly 17-fold since 2019, driven by the fact that a single AI prompt can require dramatically more compute, and therefore more power, than a standard web search. AirTrunk isn't valuable because of the buildings. It's valuable because of the contracted demand sitting behind them, the same logic as a 95MW solar farm in Segovia, just three orders of magnitude larger.
It's not only data centres, but they're the sharpest edge
The same instrument is showing up well beyond data centres. In Australia, Telstra has contracted for half the output of the Glenellen solar farm, roughly 210GWh a year, to cover its own operations. BHP signed a seven-year PPA with CleanCo to move its BMA steelmaking coal operations onto renewable power, targeting 100% renewable electricity for that operation from 2027. Corporates across telecoms, mining and heavy industry are all reaching for the same tool. But data centres are where it's moving fastest and largest, because AI compute growth is outpacing almost every other source of new electricity demand right now.
What dealmakers should actually watch
A PPA-backed asset isn't automatically a safe asset. The questions worth asking on any deal like this are straightforward, but easy to skip under time pressure:
- Counterparty concentration. If one buyer, however creditworthy, represents most of an asset's contracted revenue, what happens to the asset's value if that single relationship ends early or isn't renewed?
- Contract-to-asset-life mismatch. A 15-year PPA on an asset with a 25-30 year useful life leaves a decade of merchant exposure at the back end. Who's underwriting that tail, and at what price assumption?
- Price indexation. Fixed-price PPAs signed years apart can end up wildly out of step with each other, and with current market rates, once you're comparing a portfolio of assets rather than one deal in isolation.
None of this makes PPA-backed generation a bad bet. It's the opposite: it's exactly why this structure has become the dominant way capital gets deployed into new generation right now. But the diligence questions are different from a traditional merchant generation asset, and the last eighteen months of dealflow suggest more capital is going to be underwritten this way, not less.
That still leaves one problem neither AirTrunk nor Baobab Solar can solve on their own: however firm the contract, the power still has to physically reach the buyer. That's a grid connection problem, and it's the subject of the next piece in this series. Read More in the series 1. Why the Energy Transition Now Runs Through the Grid, Not the Turbine
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Disclaimer: This article reflects publicly available information as of the publication date and the personal analysis and views of the author. References to specific companies, transactions, and figures are drawn from the public sources cited; Ansarada has not independently verified these details beyond what is publicly reported, and does not claim any business relationship with, endorsement by, or involvement in the transactions of the companies named, except where explicitly stated. Nothing in this article constitutes financial, investment, legal, or other professional advice, and should not be relied upon as such. Views expressed are those of the author and do not necessarily represent an official position of Ansarada.
